Investing in Sports: The Next Trillion Dollar Market?
Episode publishedPodcast: Goldman Sachs ExchangesGoldman Sachs Exchanges
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For years, owning a professional sports team was, in some form or another, a very personal investment. When a team was sold and ownership changed hands, the new owner was usually just one person. Sometimes that ownership would also include a few friends and family members. Institutions like hedge funds or private equity firms were not allowed to participate in buying a team. And those were still the rules in the National Football League when Apollo co founder Josh Harris bought the Washington Commanders in 2023.
The NFL was quite restrictive as to they only would allow you a certain number of owners and then obviously their rules, in essence, vest all of the power, the control, if you will, in one person because they wanna make sure that someone can make decisions on behalf of the teams.
But these teams are a lot more expensive than they used to be. In the NFL alone, valuations have tripled in just 10 years.
In 2014, the Buffalo Bills traded for 1,400,000,000. The, Panthers traded for 2 and change. And then, in, I think, 2022, the Broncos traded for high fours. Then, obviously, we bought the Commanders at 6 18 months ago.
So buying or investing in a team now requires, quite simply, a lot more capital. And over the past 15 years, the professional sports leagues in the US and Europe have slowly loosened ownership rules to allow private equity and other institutional money to provide this capital. In some leagues, institutions can
buy a minority stake, while
in other leagues, it allows for full it allows for full ownership. But when Josh Harris was preparing a bid for the Washington Commanders, the NFL was the holdout. It was the only major league that didn't allow private equity in team ownership. So Harris assembled a group of individual investors to raise and invest approximately $5,000,000,000 of equity for that deal.
I think that everyone realized that that was very hard to do and that they thought that it was time to allow for more capital going into the business.
And about 1 year after the Commander's deal closed, the NFL finally embraced the trend and made it possible for a select group of institutions to invest in its teams. When the NFL made that choice, it meant that private equity now had access to every major sports league across both the US and Europe. It marked a new era in the business of sports. One that is already changing how teams are run, how athletes are paid, how games are watched and even the very nature of fandom. This is Investing in Sports, a mini series from the Goldman Sachs Exchanges podcast about the changing dynamics at the int
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